Maharashtra State BoardHSC Commerce 12th Board Exam
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Give Reason Or Explain. Money is the Basis of Credit. - Economics

Answer in Brief

Give reason or explain. 

Money is the basis of credit. 

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Solution

The commercial banks create credit in the economy through deposits. Money facilitates the functioning of credit instruments such as cheques, promissory notes, bills of exchange, etc. Such credit instruments facilitate transfer of value from one person to another. In this way. money forms the basis of credit.

Concept: Money - Store of Value
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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 11 Money
Exercise | Q 2.4 | Page 101
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